Investment Details
CI Result
📊 Simple vs Compound Interest
📈 Wealth Composition
💡 Compounding Insight
The power of compounding! Your money grows exponentially over time. Longer the tenure, bigger the wealth.
Frequently Asked Questions
Compound interest is interest calculated on the initial principal as well as accumulated interest from previous periods. It makes your money grow exponentially because you earn "interest on interest".
Compound Interest formula: A = P(1 + r/n)^(nt), where P is principal, r is annual rate, n is compounding frequency per year, and t is time in years. Then CI = A − P.
Compound interest is better for investments as you earn more over time. Simple interest is better for loans as you pay less total interest.
Daily compounding gives the highest returns, followed by monthly, quarterly, half-yearly, and yearly. However, the difference is small for short tenures.
The Rule of 72 tells you how many years it takes to double your money with compound interest. Formula: 72 ÷ interest rate. Example: At 8% interest, money doubles in 72/8 = 9 years.
Yes, PPF (Public Provident Fund) uses annual compounding. Current PPF rate is around 7.1% per year. PPF is one of the best tax-free compound interest investments in India.